While real estate has historically been a great investment option, of late there has been another lucrative reason… the unprecedented rise in its prices over the past few years,
which affect the time for the investors to invest in coworking office space especially in commercial projects.
Rentals have stayed constant in Bengaluru, and have fallen in Mumbai.
This can be attributed to demand for residential projects having fallen regularly over the past decade. It is mainly because of the stalled or delayed projects.
Unless looking at residential investments for end-use, investors instead are more optimistic about investing in commercial projects. But does it make sense for retail investors to invest in commercial projects?
Let’s find out.
Despite the slowdown in realty caused by the pandemic since last year, there have been various market indicators pointing towards continuous improvement on the commercial side.
These include absorption, increase in rentals and capital value.
The reasons that drive demand are:
Therefore, the commercial real estate is not only seeing an upswing in the major commercial hotspots, but also in tier-2 towns.
Since the work and shopping dynamics have changed greatly since the start of 2020, the inventory supply has adapted itself too to keep up with the demand.
The instant, adapted supply has driven the demand further:
In fact, coworking spaces are not limited to metros anymore. Smaller emerging commercial places are also making way for coworking spaces.
While any investment comes with its own sets of risks, it pays to do your due diligence, remember the points before investing in office spaces.
Research on the developer : Understand the timeliness of the projects undertaken by the developer in the past. Delivering on or before time is paramount.
Location of the project : This is as important if not more than the above point. The location must have a commercial/office space viability.
To understand this, study the offices and the nature of the companies in the neighbourhood.
Payment plan : Clearly understand the terms of payment offered. Understand if there are any hidden costs.
This is crucial because a lot of times the amount on paper may inflate to an unaffordable sum over a period.